Drivers of currencies thread.

[scose-no-doubt]

Hi everyone,

Anyone know any sort of fundamental/sentiment drivers for the currencies aside from the standard data releases and rate differentials?

Eg.

EUR - Risk
JPY - Carry
CAD - Oil/Energy

Fill in the blanks if you will with whatever currency you like.

Bón

 

[gooseman]

all of them-repo market

 

[scose-no-doubt]

*sigh*

Was hoping for an easier answer than that tbh

 

[scose-no-doubt]

all of them-repo market

You know what... this makes hella sense. Thanks, gooseman.

 

[scose-no-doubt]

I think :s

 

[MrGecko]

The one thing I would say about this is that nothing lasts forever - particularly correlations. One moment EUR will rally on increased risk appetite, while under different circumstances it will sell off.

As an aside, something I think it's worthwhile to keep an eye on is whatever the "flavour of the month" is, and how a trade on that theme could be expressed in the currency markets. Quite often you find that currencies are the first to move and other asset classes follow.

recent examples e.g.
Greece - EUR/USD
China - AUD/USD
Flight to Quality - USD/JPY

all IMHO.

 

[Martinghoul]

Sometimes ratings agencies? Not that I approve or anything...

 

[counter_violent]

Theres only One game in town presently and that's flight to risk or safety.
Manifests itself in the movements of JPY and not in the USD as some would have you believe.
Endex.

 

[cr6196]

another one that sometimes applies is debt/trade deficits...altho the effect appears random, i.e reagan's imperial circle, big budget deficit but quickly appriecating currency, which is completely counter-intuitive in a way. another one is trying to work out what the capital flows are, like where are trade surpluses going etc? i looked into this with Japan for a bit, is pretty complicated tho and collecting the info can be a bit of a hassle and required some knowledge on government/cb policy which is also tricky.

 

[scose-no-doubt]

another one that sometimes applies is debt/trade deficits...altho the effect appears random, i.e reagan's imperial circle, big budget deficit but quickly appriecating currency, which is completely counter-intuitive in a way. another one is trying to work out what the capital flows are, like where are trade surpluses going etc? i looked into this with Japan for a bit, is pretty complicated tho and collecting the info can be a bit of a hassle and required some knowledge on government/cb policy which is also tricky.

Thats too much of a nightmare to be honest. By time you get all the info you need, analyse and get ready to implement you'll probably miss the trade lol

 

[scose-no-doubt]

Thanks guys. Nice to have a bit of reassurance when you're learning. Especially when nobody else you know gives a sh1t lol.

 

[wackypete2]

I don't think my .01 lot is driving the market much.

Peter

 

[wirraltraders]

For the euro you need to look at the EURO-BUNDS CORRELATIONS: Euro proving to be more responsive to rising bund yields than USDX is to rising US bond yields. EURUSD correlation with German 10 year yields stood around 0.93 since May vs. -0.62 for the correlation between USD Index and US 10 yr yields.EURUSD is more responsive to gains in German bund yields as opposed to the relationship between USDX and 10-year note where the correlation breaks more occasionally and sometimes becomes inverse. This means that EURUSD will likely extend gains on strong Eurozone figures, which may include econ data and European earnings.

There are other reasons as well - for instance the actual debt level of the USD per GDP is comparable to Greece - but no-one wants to talk about it. US wants to carry on printing money. I bought the euro/usd this week at 12930 and have exited not long ago at 13090 - but that is only a temporary exit as I believe the euro is going up to 135. Looking for a decent retraction and consolidation from support, I will get back in soon and hold for next week and prob the week after if I can....

 

[MrGecko]

If you are going to quote someone verbatim, at least do the decent thing and credit them with the comment.

 

[wirraltraders]

If you are going to quote someone verbatim, at least do the decent thing and credit them with the comment.

The euro bunds correlation issue is widely known and you will see the same quote type all over the Internet when looking for fundamentals about this issue....I'm just passing it on again like 100's of others have in the pursuit of greater knowledge and understanding of the issues...

 

[MrGecko]

The euro bunds correlation issue is widely known and you will see the same quote type all over the Internet when looking for fundamentals about this issue....I'm just passing it on again like 100's of others have in the pursuit of greater knowledge and understanding of the issues...

2010.07.27 12:25: EURO-BUNDS CORRELATIONS: Euro proving to be more responsive to rising bund yields than USDX is to rising US bond yields. EURUSD correlation with German 10 year yields stood around 0.93 since May vs. -0.62 for the correlation between USD Index and US 10 yr yields. The CHARTS below http://chart.ly/rmn3ns show EURUSD is more responsive to gains in German bund yields (lower left chart) as opposed to the relationship between USDX and 10-year note (upper left), where the correlation breaks more occasionally and sometimes becomes inverse. This means that EURUSD will likely extend gains on strong Eurozone figures, which may include econ data and European earnings.

You even removed the link to the chart so as to not make it obvious that you were not the author of this comment.

Ashraf's website can be found here where you can subscribe to various emails / RSS feeds that are free and informative.

Wirraltrader, you are a feckless little gobsh!te with the charisma of a tampon.

 

[wirraltraders]

Ashraf's website can be found here where you can subscribe to various emails / RSS feeds that are free and informative.

Thank you for your informative comments. Yes I like Ashrafs Fundamental analysis on occassion - although he gets much of his information from many other sources as well. Thats my point - the information is generally known already regardless of who is repeating it (including Ahraf) as I tried to point out before your knee jerk reaction. There is nothing unique about his point of view I'm afraid...

I wonder - if you know so much about all the "Fundamentals Pundits" out there who are giving useful information to members here, why have you not posted some it yourself in the spirit of trying to help people and illuminate their knowledge to help their trading?

 

[wirraltraders]

Wirraltrader, you are a feckless little gobsh!te with the charisma of a tampon.[/QUOTE]

Sounds like you had a bad week....

 

[MrGecko]

<rightclick> <add wirraltraders to your ignore list> <yes>

 

[Martinghoul]

No, but, seriously, wirral, don't you think it's rude, discourteous and downright dishonest to copy and paste something into your post that was not written by you, without any acknowledgment or reference?

As to whether the original author's view was unique or not, it certainly was unique enough that you felt you wanted to reproduce his particular analysis verbatim. If this information is "generally known already", why didn't you actually write it down in your own words? Moreover, even if this information is known, writing is a skill, so not giving the author their due and passing the analysis off as your own work is inexcusable.

If you refuse to admit that you did wrong, you ARE MOST DEFINITELY A FECKLESS GOBSH!TE, as MrG says.